UK & India Free Trade Agreement

India and the UK officially concluded negotiations for a Free Trade Agreement (FTA) on May 6, 2025, marking a significant milestone in their economic relationship. The talks for this ambitious trade pact initially began in January 2022.

The primary objective of the India-UK FTA is to double bilateral trade in goods and services from the current USD 60 billion to USD 120 billion by 2030. This agreement aims to provide enhanced market access for a wide range of Indian goods and services in the UK, while British firms are expected to enjoy comparable benefits in the Indian market.

Some key aspects of the agreement include:

• Tariff Reductions: India is set to reduce tariffs on 90% of British goods, with 85% of these becoming completely duty-free over a decade. Conversely, the UK will eliminate tariffs on 99% of Indian exports, covering almost 100% of the trade value.
• Key Sectors Benefiting:
  • Indian Exports: Apparel, home textiles, marine products, leather, footwear, sports goods, toys, gems and jewelry, engineering goods, auto parts, and engines are expected to gain significant access to the UK market.
  • UK Exports: Products like whisky, gin, advanced machinery, medical devices, aerospace components, lamb, salmon, soft drinks, chocolate, and biscuits will see lower tariffs in India. Tariffs on whisky and gin, for instance, are expected to be halved from 150% to 75% and then further reduced to 40% over 10 years. Automotive tariffs are also set to decrease from over 100% to 10% under a quota.
• Services and Mobility: The FTA includes ambitious commitments for services, covering sectors like IT/ITeS, financial services, professional services, and educational services. A "Double Contribution Convention" has also been agreed upon, exempting Indian workers temporarily seconded to the UK (and vice versa) from social security contributions for three years, aiming to boost professional mobility and reduce costs for businesses.
• Public Procurement: UK businesses will gain access to India's public procurement market, which involves approximately 40,000 tenders annually with a value of at least £38 billion.

While the negotiations have concluded, the formal signing and ratification process is expected to take some time, with implementation anticipated within one year of the conclusion date. This agreement is seen as a crucial step in strengthening the economic and strategic partnership between India and the UK in a rapidly evolving global economy.

For a detailed analysis and key strategic insights, download the full article on "United Kingdom & India FTA" today.

Related Market Research Reports: